FINANCING FOR GLOBAL EDUCATION - OPPORTUNITIES FOR MULTILATERAL ACTION

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FINANCING FOR GLOBAL EDUCATION - OPPORTUNITIES FOR MULTILATERAL ACTION
FINANCING FOR
      GLOBAL EDUCATION
OPPORTUNITIES FOR MULTILATERAL ACTION
            A report prepared for the UN Special Envoy for Global Education
                           for the High-level Roundtable on Learning for All:
                       Coordinating the Financing and Delivery of Education

                                                             PAULINE ROSE
                                                            LIESBET STEER
                                           With Katie Smith & Asma Zubairi

                                                          SEPTEMBER 2013

         Center for
         Universal Education
         at BROOKINGS
FINANCING FOR GLOBAL EDUCATION - OPPORTUNITIES FOR MULTILATERAL ACTION
The Center for Universal Education at the Brookings Institution

The Center for Universal Education (CUE) at the Brookings Institution is one of the leading policy centers focused
on universal quality education in the developing world. CUE develops and disseminates effective solutions to
achieve equitable learning, and plays a critical role in influencing the development of new international education
policies and in transforming them into actionable strategies for governments, civil society and private enterprise.

For more about the Center for Universal Education at Brookings, please visit: www.brookings.edu/universal-
education.

Education for All Global Monitoring Report

Developed by an independent team and published by UNESCO, the Education for All Global Monitoring Report
is an authoritative reference that aims to inform, influence and sustain genuine commitment towards Education
for All (EFA). It tracks progress, identifies effective policy reforms and best practice in all areas relating to EFA,
draws attention to emerging challenges and seeks to promote international cooperation in favour of education.

For more about the Education for All Global Monitoring Report, please visit: http://www.efareport.unesco.org.
FINANCING FOR GLOBAL EDUCATION - OPPORTUNITIES FOR MULTILATERAL ACTION
Pauline Rose is the Director of the Education for All
                                                            Global Monitoring Report.

                                                            Liesbet Steer is a Fellow at the Center for Universal
                                                            Education at the Brookings Institution.

                                                            Katie Smith is a Research Analyst at the Center for
                                                            Universal Education at the Brookings Institution.

                                                            Asma Zubairi is a Research Officer at the Education
                                                            for All Global Monitoring Report.

Acknowledgements

This report is a joint research effort by teams from the Center for Universal Education at the Brookings Institution
and the Education for All Global Monitoring Report, published by UNESCO.

We are grateful to Karen Mundy, Brad Herbert and Birger Fredriksen for their support in preparing the back-
ground case studies for this study and their contributions to this report; and to Lydia Poole for her help with the
data analysis. We are also thankful to the staff of the six multilateral agencies reviewed in this study for sharing
their thoughts in interviews.

We would also like to thank Paul Isenman, Tamar Manuelyan Atinc and Rebecca Winthrop for their inputs into the
research and helpful reviews of drafts of the report.
CONTENTS

Executive Summary. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 1

1. Introduction.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4

2. Basic Education – Still a Global Priority? .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 9
         Education Is Prioritized in Official Donor Strategies, and in Client Surveys .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 9
         Multilateral ODA for Education Has Increased, but Fallen Short of Expectations. .  .  .  .  .  .  .  .  .  .  . 11

3. Needed: A Coordinated Global Response .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 18
         Coordination Efforts in Education.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 18
         Education Aid Remains Highly Fragmented.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 18
         Multilaterals are not Sufficiently Filling Gaps in Countries with the Greatest Need .  .  .  .  .  .  .  . 23

4. Opportunities for Action: Engaging Multilateral Financing.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26
         Opportunity 1: Inspire Demand for More Support for Basic Education.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26
         Opportunity 2: High-Level Strategic Dialogue to Target Countries in Need. .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 28
         Opportunity 3: Improve Information on Financial Data.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 29
         Opportunity 4: Catalyze Domestic Resources. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 30
         Opportunity 5: Crowd in Innovative Finance . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 32

5. Conclusion. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 35

Annex: 41 Countries in Need .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 36

References .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 38

Endnotes.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 42
TABLES

1. Overview of Corporate and Education Strategies in Multilateral Agencies. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10

2. Top 10 Funders of Basic Education, 2002-2011.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 17

3. Selected Examples of Donor Coordination Initiatives by Multilateral Donors in Education .  .  .  . 19

4. Fragmentation Rate of Education ODA for Countries in Need, 2011.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 21

Figures

1. Multilateral Aid to Education has Grown Over the Decade, 2002–11 (Millions of Dollars). .  .  .  .  .  . 12

2. Multilateral Aid to Basic Education is a Declining Share of Total Multilateral Aid to Education,
   2002–11.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 13

3. Basic Education Share in Total Education Financing Is Declining for Four Large
   Multilaterals—AfDB, EU Institutions, World Bank and UNICEF.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 14

4. Earmarked Bilateral Aid to Education Channeled through Multilaterals, 2007–11 .  .  .  .  .  .  .  .  .  .  .  . 16

5. Number of Significant and Nonsignificant Education Aid Relationships Based on 2011 Levels
   of Country Programmable Aid. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 20

6. Number of Significant Education Aid Relationships Based on 2011 Levels of Country
   Programmable Aid.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 22

7. Share of Basic Education Aid to Countries in Need (2009–11 average) .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 24

8. Wide Variations in Basic Education Aid per Primary-School-Age Child in 41 Countries in
   Need, 2011 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 25
FINANCING FOR GLOBAL EDUCATION
OPPORTUNITIES FOR MULTILATERAL ACTION

Pauline Rose
Liesbet Steer
With Katie Smith & Asma Zubairi

EXECUTIVE SUMMARY                                             as well as bilateral and multilateral donors. There is
                                                              also opportunity for an increasingly important role for

A
keep.
        ccess to good quality basic education for all chil-
        dren is a promise the global community must
                                                              the private sector.

                                                              Based on data analysis and case studies of the six most
                                                              important multilateral donors in education, this report
This will require reaching the 57 million children that
                                                              explores the role they could play either through their
are currently out-of-school, many of them from mar-
                                                              own resources or through mobilizing others. Special
ginalized and disadvantaged groups. It will require
                                                              attention is paid to 41 countries in greatest need.
ensuring that children in school complete their edu-
                                                              These countries include the 35 low-income countries
cation and are learning – currently 250 million chil-
                                                              whose own resources are limited, together with the
dren in school cannot read or count at basic levels.
                                                              6 middle-income countries which are amongst the 10
It can be done, and we know how to do it. Many more
                                                              countries with the highest out-of-school populations.
children are in school today than ever before, and
                                                              Multilaterals’ significance in the aid architecture and
over the past decade the number of out-of-school chil-
                                                              their unique capacity to pool funding, convene donors
dren fell by 45 million.
                                                              and be a lender of last resort, provides them with a
                                                              number of opportunities to play a significant role.
While recognizing the complexity of the task and the
need for a wide variety of solutions, this paper focuses
                                                              Public statements of multilateral institutions sug-
on how the international community, and multilateral
                                                              gest a strong commitment to education. In addition,
agencies in particular, can contribute through mobiliz-
                                                              surveys of developing country stakeholders in gov-
ing the necessary financial resources and ensuring
                                                              ernments, civil society and the private sector show
their effective use. After taking account of available
                                                              a strong demand for education support more widely.
domestic and donor resources, it is estimated that an
                                                              However, despite this strong prioritization and de-
additional $26 billion will be needed per year to make
                                                              mand there is evidence that multilateral support for
sure all children receive a basic education by 2015.
                                                              basic education is slowing compared to other sectors
This gap will need to be filled by domestic resources,

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                                   1
and to bilateral donors. Moreover, some multilateral        to prioritize countries in need more strongly than bi-
    agencies have increasingly prioritized higher educa-        lateral donors, there is significant variation. The EU
    tion over the past decade, putting pressure on basic        disburses only 40 percent of its basic education aid
    education financing. This has led to a reduction in ba-     to the 41 priority countries, compared with 84 per-
    sic education’s share of the total education aid from       cent for UNICEF to the same countries. Substantial
    multilateral institutions -- from 62 percent at the be-     variation is also found in the volume of aid disbursed
    ginning of the decade to 51 percent in 2011. Unless the     to countries in need. While it is estimated to cost
    overall envelope for multilateral aid is increased, there   on average around $130 per year to provide a child
    is a danger that growing support to new areas such as       with an acceptable quality of primary education in
    skills development will squeeze the scarce resources        poorer countries, basic education aid disbursed per
    for basic education even further, to the detriment of       primary-aged child ranges from $7 in DRC to $63 in
    the most disadvantaged.                                     Haiti. Analysis also suggests that multilateral donors
                                                                have not always been able to fill gaps left by bilateral
    Donors and multilateral agencies in particular, are         donors. Amongst the 41 countries in need, 22 receive
    strong advocates of internationally agreed aid ef-          less than $10 per child from bilateral donors, even
    fectiveness principles and are engaged in a number          though needs are much larger. In only 6 of the 22
    of country and global coordination mechanisms.              countries have multilaterals been able to significantly
    Coordination at the country level is strongly promoted      fill the gap.
    by the Global Partnership for Education through its
    support to Local Education Groups and the develop-          This report makes no claim to provide comprehensive
    ment of country-owned education sector plans. But           recommendations for filling the remaining financing
    despite significant efforts, education remains highly       gaps, nor does it claim that solutions to provide edu-
    fragmented, leaving some countries with too many            cation for all involve financing alone. Rather it sug-
    donors and high transaction costs and others with           gests five opportunities for action which could make
    too few donors to generate a minimum level of sup-          a major contribution in enhancing the role that multi-
    port to meet needs. The number of donors active in          lateral agencies can play. Detailed proposals are made
    education in the 41 countries in highest need ranged        under each of the following:
    from 6 in the Central African Republic (CAR) to 23 in
    Tanzania. Nearly half of the countries in need have to      • Opportunity for Action #1: Inspire demand for
    coordinate with 15 or more donors in education. More          more support for basic education. Decision-making
                                                                  in multilateral agencies is firmly anchored at the
    than one-third of the donor relations in education in
                                                                  country level and program priorities are determined
    the 41 countries can also be considered as “non-signif-
                                                                  in close dialogue with country government and
    icant” as defined by OECD-DAC.                                other development partners. When asked why mul-
                                                                  tilateral support for education, and basic education
    Lack of genuine coordination at the global and coun-          in particular, was not greater, managers often cited
    try level makes it much harder for multilateral donors,       the low level of country demand. However, multilat-
                                                                  eral client surveys suggest demand for basic edu-
    particularly those that are seen as the funders of last
                                                                  cation is very high, even for loan funds. Evidence
    resort, to fill gaps in financing and target countries
                                                                  also indicates that demand is felt more strongly by
    with highest needs. While multilateral donors do seem         donors who already prioritize education, suggest-

2   FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION
ing recipients direct their demand to those donors       develop National Education Accounts as a matter
  who are interested in responding to it. As is clear      of urgency. The technical leadership of UNESCO
  from other sectors such as governance and climate        Institute for Statistics and International Institute for
  change--where demand is much weaker than in              Education Planning, among other partners, in de-
  basic education but multilateral support is growing      veloping a shared approach to National Education
  rapidly--demand can be created in a positive man-        Accounts is an important first step. To be effective,
  ner as part of deep partnerships and dialogue at         it will be vital that this work benefits from collabo-
  the country level. Incentives need to be provided        ration with other multilateral institutions, including
  to country managers to inspire such demand for           those with experience in developing National Health
  MDG priority areas, including basic education. Some      Accounts who could contribute to the expansion
  good practices are emerging. In-country technical        and acceleration of this new initiative. Given its re-
  capacity in basic education is an essential element      sponsibility for ensuring financing gaps are filled,
  of efforts to increase demand and effective support.     GPE could play a leadership role in coordinating the
                                                           development of these National Education Accounts.
• Opportunity for Action #2: Organize high level
  dialogue to target countries in need. One impor-       • Opportunity for Action #4: Catalyze domestic
  tant role of multilateral agencies is to provide and     resources. Domestic resources will continue to be
  attract high level global leadership to mobilize         the most important source of finance for education.
  and coordinate support for countries in need. This       Multilaterals could play a stronger role in helping
  high level coordination is particularly important in     countries to mobilize resources and by ensuring
  education, as the sector has a narrow donor base.        that sufficient resources are allocated to human de-
  The top 10 donors provide close to three quarters        velopment, including education. The adoption and
  of all aid. This means that uncoordinated entry          monitoring of financing goals could be a potential
  or withdrawal from the sector could have serious         means of holding governments accountable.
  implications. Support for the elevation of Global
  Partnership for Education’s board membership to        • Opportunity for Action #5: Crowd in innovative
  include high level representation of donors, along-      finance. While innovative financing in development
  side ministers of education from developing coun-        has been growing over the past decade, estimated
  try partners, is one way to promote its power to         to amount to over $50 billion between 2000 and
  bring about change. Continuation of the high level       2008, education has not been a major beneficiary.
  meetings as part of the UN Secretary General’s           Innovative finance with strong short-term profit
  Education First Initiative could also help encourage     motives will not be appropriate for education, but
  this much needed high level dialogue and establish       there are a number of other options the educa-
  recommendations for concrete action.                     tion sector could explore, including tapping into
                                                           diaspora communities and private companies with
• Opportunity for Action #3: Improve information           long-term investment interests. Multilateral agen-
  and financial data. To facilitate the mobilization       cies could play a critical role in helping developing
  of additional resources, and ensure they are bet-        countries to navigate different types of innovative
  ter spent, action is urgently needed to present          finance and facilitate partnerships between the
  a more complete picture of education financing.          government and private investors interested in sup-
  Multilateral agencies should support efforts to          porting education.

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                                 3
1. INTRODUCTION                                             we examine how multilateral agencies could mobilize
                                                                and better allocate the financial resources necessary

    T   oday more children than ever before are in
        school. Between 1999 and 2011, the number
    of children out of primary school fell by 45 million
                                                                to keep the promise that “no country seriously com-
                                                                mitted to education will be thwarted in their achieve-
                                                                ment of this goal by a lack of resources“ (World
    (UNESCO 2013f). This progress has been driven in part
                                                                Education Forum 2000). While financing is the focus
    by the collective action catalyzed by the Millennium
                                                                of this paper, we recognize that achieving education
    Development Goals (MDGs) and the Education for All
                                                                for all will also require wider solutions, such as im-
    (EFA) goals set out 13 years ago. This is good news not
                                                                proved accountability and systems of delivery as well
    only for children’s rights but also for economic growth,
                                                                as addressing issues of absorptive capacity.1
    health, political development and environmental prog-
    ress. The benefits of education to these and a range
    of other important development outcomes have been
                                                                Basic Education at Risk
    well documented and widely acknowledged (Burnett,
                                                                Recent analysis shows that the efforts to provide ac-
    Guison-Dowdy and Thomas 2013; UNESCO, 2013c).
                                                                cess to a basic education for all children and youth
                                                                are in peril. Worldwide, there are still 57 million chil-
    However, while there is much to celebrate, the goal of
                                                                dren out of primary school, largely from marginalized
    providing a quality education for all is an unfinished
                                                                populations such as boys-but especially girls-who are
    agenda. Despite progress in access to primary school,
                                                                affected by armed conflict, extreme poverty and dis-
    millions of children are still denied the opportunity to
                                                                ability (UNESCO 2013f).
    attend school, including access to early childhood or
    post-primary education opportunities, essential com-
                                                                But finding ways to get these hard-to-reach children
    ponents of a young person’s education career. Even
                                                                into school will not be sufficient. Keeping children in
    for those that are in school, the quality of learning
                                                                school is an even larger challenge. Globally, 200 mil-
    is woefully inadequate in many schools around the
                                                                lion children have not completed primary school, and
    globe (CUE, 2011). In this report, we recognize the
                                                                many who start school leave early, both because of
    importance of secondary and post-secondary educa-
                                                                the poor quality of education and also due to house-
    tion but focus our analysis on basic education, an es-
                                                                hold factors such as poverty (UNESCO 2012a). The
    sential foundation for later learning. For this analysis,
                                                                magnitude of the problem will only increase in the
    we follow the definition of basic education articulated
                                                                future due to the fast-growing population of children
    by the Organization for Economic Cooperation and
                                                                and youth, particularly in countries that are struggling
    Development’s Development Assistance Committee
                                                                the most to provide basic education to their children.
    (OECD-DAC), which covers early childhood educa-
                                                                For example, in Sub-Saharan Africa the population of
    tion, primary education and basic skills for youth and
                                                                children between the ages of 5 and 14 years of age
    adults.
                                                                is estimated to grow 45 percent between 2010 and
                                                                2030. For youth between 15 and 24 years of age, 25
    The focus of this report is on how the international
                                                                percent in Sub-Saharan Africa and 12 percent in South
    community, and multilateral agencies in particular,
                                                                and West Asia are projected to be illiterate by 2015.
    can contribute to meeting the existing global commit-
                                                                Not only will there need to be sustained and increased
    ments to a quality basic education for all. Specifically,

4   FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION
efforts to help these young people access and com-
plete school, but second-chance education programs            While total aid levels declined by 3
for youth must also be an important part of the solu-         percent between 2010 and 2011, aid to
tion (UNESCO 2012b).                                          basic education aid fell, for the first time
                                                              since 2002, by 6 percent--from $6.2
The quality of education, and ensuring that children          billion in 2010 to $5.8 billion in 2011. The
who enter school master foundation skills, is an in-          poorest countries were hit even harder,
tegral part of a successful basic education agenda.           with a 7 percent decline between 2010
Worldwide, 250 million children cannot read, write            and 2011, equivalent to $149 million (or
or count well—many despite having spent four years            enough to send 1.1 million more children
in school. Children who enter school but, for a range         to school in these countries).
of reasons, are unable to acquire basic reading skills
in the first few years will inevitably struggle to keep
up and eventually will leave before completing school
(UNESCO 2012b).                                            mestic capacity constraints, this gap is unlikely to be
                                                           filled and, if anything, will continue to widen. While to-
                                                           tal aid levels declined by 3 percent between 2010 and
Basic Education Financing and the Role of                  2011,3 aid to basic education aid fell, for the first time
Multilateral Institutions                                  since 2002, by 6 percent--from $6.2 billion in 2010
The EFA Global Monitoring Report (UNESCO 2012b)            to $5.8 billion in 2011. The poorest countries were hit
estimates that it will cost a total of $54 billion annu-   even harder, with a 7 percent decline between 2010
ally to provide a basic education for all by 2015 in 46    and 2011, equivalent to $149 million (or enough to send
low-income countries (LICs) and lower-middle-income        1.1 million more children to school in these countries).
countries (LMICs). In 2010, a total of $28 billion was     Aid to basic education for countries in Sub-Saharan
spent on basic education. Domestic spending was by         Africa also declined by 7 percent, despite being home
far the most important source of funding for basic         to half of the total children out of school (UNESCO
education, accounting for $25 billion. The remaining
                                       2
                                                           2013f).
$3 billion came from donor resources. While this falls
far short of the amount required to fill financing gaps,   The gap will need to be filled by three major sources
it has played a particularly vital role in some of the     of financing for basic education: country budgets, bi-
world’s poorest countries, where domestic resources        lateral donors and multilateral agencies. There is also
are too scarce to fill the financing gap. For instance,    an increasingly important role for the private sector.
in nine Sub-Saharan African countries, donors funded
more than a quarter of public spending on education        This report analyzes the role that multilateral agen-
(UNESCO 2013b).                                            cies can play, either through their own resources or by
                                                           mobilizing others. These donors are important players
Yet, after taking account of these available domestic      in the global aid landscape, including in education. In
and donor funds, there is an estimated $26 billion         2010, they disbursed nearly 40 percent of total ODA.
global financing gap remaining each year. There is a       Bilateral donor investments in the multilateral system
concern that with overall declining aid levels and do-     have also shown an upward trend in recent years, and

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                                   5
continued to do so during the 2008–9 global financial       Indeed, this ability to fill gaps and reach places in need
    and economic crisis when overall bilateral aid flows        is one of the reasons bilateral agencies often decide
    were falling. In addition to the traditional unear-
                 4
                                                                to channel funding through multilateral institutions.
    marked contributions, bilateral donors have also been       Multilaterals have also been credited for their strong
    channeling a growing amount of special purpose or           technical capacity, knowledge base and multisectoral
    earmarked funds through multilaterals (OECD 2012).    5
                                                                approach. In addition, their strong convening power
                                                                provides a platform to promote aid coordination.
    A number of characteristics make multilateral agen-
    cies attractive channels for development aid. By na-
    ture, they pool funding from different donors, thereby
    improving aid coordination. Compared with bilateral
    agencies, multilateral donors are less encumbered by           Multilaterals play a significant role in
    historical and geopolitical relationships in the alloca-       the education sector. The five largest
    tion of their aid. They are, therefore, better able to         institutions contributed 25 percent of
    allocate funding according to need. Often considered           total ODA to education over the past
    as the funder of last resort, their disbursement lev-          decade.
    els would in principle depend on the need to be met.

            Box 1. How Is Aid to (Basic) Education Defined?
            The aid data analysis in this paper is focused on concessional financing, or official development
            assistance (ODA) for education, as defined by the OECD-DAC. The OECD presents ODA data on
            education in four categories: basic, secondary, postsecondary and “level unspecified.” Basic edu-
            cation is defined by the DAC as covering early childhood education, primary education and basic
            life skills for youth and adults. In addition to sector-specific aid, the OECD-DAC presents data on
            general budget support that also benefits education. This report calculates ODA to basic educa-
            tion as the total of three types of spending: sector allocable aid to basic education, 50 percent of
            sector allocable aid to education with level unspecified and 10 percent of general budget support.
            This methodology is also used to calculate aid to basic education in the EFA Global Monitoring
            Report.7 All data are disbursements in 2011 constant prices. Multilateral ODA reported in this
            paper refers to aid attributed to these agencies by OECD-DAC and, as such, does not include
            earmarked financing or multi-bi ODA for education (i.e. bilateral ODA earmarked for a specific
            purpose, sector, region or country and channeled through multilateral institutions e.g. in the form
            of non-core contributions to trust funds) or non-concessional financing for education provided by
            multilateral banks.

6   FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION
Multilaterals play a significant role in the education       the Global Partnership for Education (GPE), was cho-
sector. The five largest institutions contributed close      sen because, although it does not report its financing
to 25 percent of total ODA to education over the past        to the OECD, based on its own financial data it is the
decade. By analyzing the landscape for education
        6
                                                             fifth largest donor to education.8 It should be noted
aid using the OECD-DAC data on ODA this report pro-          that the six agencies vary in terms of the financing in-
poses five opportunities for action to strengthen mul-       struments they deploy and the geographical area they
tilateral support for basic education.                       cover. For example, while the World Bank, EU institu-
                                                             tions, the GPE and UNICEF have a global mandate, the
The report complements its aid data analysis with            ADB and AfDB are focused on specific regions. Their
case studies of six multilaterals (see box 2 for details).   geographical reach is important, especially given that
Five of these institutions are the largest multilat-         many bilateral agencies are reducing the number of
eral agencies in terms of total financing for educa-         countries in which they operate. Each multilateral
tion, as reported through the OECD-DAC: the Asian            was reviewed through a careful analysis of its existing
Development Bank (ADB), the African Development              documents and reports and a series of interviews with
Bank (AfDB), the European Union institutions, the            its senior staff members.
World Bank and UNICEF. The sixth multilateral agency,

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                                   7
Box 2: Six Multilateral Donors and ODA Funding Instruments
                     OECD DAC
     Organization                      Description and ODA Instruments
                     ODA category
                                       Provides financial and technical assistance to over 120 countries with the
                     World Bank -      aim of reducing poverty and enhancing development.
     World Bank
                     IDA               The World Bank’s ODA is provided through the International Development
                                       Association (IDA).
                                       Formulates and implements the EC’s development policy and aid to
                                       developing countries.
                                       The EC’s ODA is provided through two instruments:
     European
                                       (1) Development and Cooperation Instrument (DCI) is part of the EC budget
     Commission      EU Institutions
                                       and provides funding for non- Africa Caribbean Pacific (ACP) countries as
     (EC)
                                       well as thematic funding;
                                       (2) European Development Fund (EDF) is independent of the EC budget
                                       and provides funding for ACP countries.
                                       United Nations specialized agency active in more than 190 countries in
                                       which it provides financial and technical assistance focused on children, as
     UNICEF          UNICEF            well as mothers.
                                       UNICEF’s ODA includes its regular or unearmarked funding only. It does not
                                       include thematic or earmarked funding.
     African                           Aims to promote sustainable economic growth and reduce poverty through
     Development     AFDB-ADF          technical and financial assistance to 54 African countries.
     Bank (AfDB)                       The AFDB’s ODA is provided through the African Development Fund (ADF).
                                       Aims to reduce poverty and improve and sustain inclusive economic growth
     Asian                             within the Asia region.
     Development     ADB-ADF           ADB’s ODA is provided through the Asian Development Fund (ADF). ADF
     Bank (ADB)                        provides funding to 29 countries and is the largest of the ADB’s Special
                                       Funds that provide concessional financing.
                                       Established in 2002 as the Education for All Fast Track Initiative, GPE is
                                       a partnership with a range of stakeholders that work to improve global
                                       coordination and support for basic education. GPE provides support to 58
                                       developing countries. The GPE Fund, launched in 2011, provides financing
     Global
                     Does not          for all of GPE’s country-level, regional and global activities.
     Partnership
                     report to         The GPE fund includes three forms of grants:
     for Education
                     OECD-DAC          (1) Program Implementation Grant, supports implementation of national
     (GPE)
                                       education sector plans;
                                       (2) The Education Plan Development Grant, supports education sector plan
                                       development;
                                       (3) Program Development Grant, supports goals within national plans.

8   FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION
2. BASIC EDUCATION – STILL A                                1). Some strategies, notably from the ADB and the

GLOBAL PRIORITY?                                            AfDB, have a stronger focus on higher levels of edu-
                                                            cation.

T   here is widespread recognition that education
    should be a global priority. This is exemplified by
voters from around the world in the online MyWorld
                                                            There is also high demand for support for education
                                                            by client countries. Recent client surveys by the World
survey for post-2015 goals, who consistently identi-
                                                            Bank and ADB indicate that demand for education
fied education as the number one priority. It is also
                                                            financing, even in the form of loans, is very strong.
a central theme in the High-Level Panel report (UN
                                                            Education was the most frequently cited develop-
2013). Achieving universal primary education, the sec-
                                                            ment priority by a total of 41 percent of respondents
ond MDG, is often identified as one of the areas where
                                                            in World Bank client countries.10 It was also the sec-
progress has been made, even though, with 57 million
                                                            tor with the highest demand for support and atten-
children still out of school substantial unfinished busi-
                                                            tion from the World Bank (again, by 41 percent of
ness is recognized.
                                                            respondents in all client countries).11 This demand was
                                                            higher in LICs and LMICs than in upper-middle-income

Education Is Prioritized in Official                        countries (UMICs), at 39 percent, 44 percent and 34

Donor Strategies, and in Client                             percent, respectively. Together with health, the World

Surveys                                                     Bank’s education sector work also received the high-
                                                            est effectiveness rating by client countries (World
Reflecting this global priority, education is highlighted
                                                            Bank 2012).
in the overall strategy and vision documents of the six
multilateral agencies reviewed and further refined in
                                                            Similarly, a recent survey of ADB client countries re-
sector-specific strategies. Some agencies have also
                                                            vealed that 35 percent of the countries had requested
established specific spending targets or made pledges
                                                            support for education (IED 2013). A United Nations
on their education spending. Most of the recent edu-
                                                            survey, conducted in 2012, further confirms the high
cation sector strategies identify an urgent and un-
                                                            demand for education among national governments.
finished agenda with respect to achieving important
                                                            Approximately 55 percent of respondents cited edu-
aspects of the universal primary education objective,
                                                            cation in the top five desired priorities for United
such as improving quality, school completion rates
                                                            Nations country-support.12 The share was significantly
and equity. In addition, strategies also recognize the
                                                            higher among low-income and lower-middle income
complementary need for post–primary education and
                                                            countries (United Nations 2012). Finally, the strong
skills development as well as, in some cases, school
                                                            demand was also highlighted in a 2010 study of ba-
readiness and early childhood development (see table
                                                            sic education finance that included interviews with a
                                                            variety of donor agencies (including four multilateral
                                                            agencies), in which a majority of respondents strongly
   Education was the most frequently cited                  agreed with the statement that “the majority of part-
   development priority by a total of 41                    ner countries consistently ask for more support for
   percent of respondents in World Bank                     primary education.” According to the survey, recipi-
   client countries.                                        ents (both governments and implementing agencies)

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                                 9
Table 1. Overview of Corporate and Education Strategies in Multilateral Agencies
                     Prioritization of Education                                                      Education
                                                   Recent Education Strategy and Priority
      Agency         in Overall Strategy or                                                           Spending
                                                   Areas
                     Vision                                                                           Target
      ADB            Strategy 2020 (2008)—         Education by 2020—A Sector Operations Plan         Support to
                     education is one of five      (2010)—focus on strengthening quality and          education will
                     core specializations and      developing skills at all levels of education       double to 6%
                     comparative strengths                                                            of operations in
                                                                                                      2012–14
      AfDB           Strategy 2013–22—At           Higher Education, Science & Technology
                     the Center of Africa’s        (HEST) strategy (2008)—represents a shift
                     Transition—“skills and        from basic education towards higher education
                     technology” is one of five    (AfDB 2008). Earlier Education Sector
                     operational priorities        Strategy (2000) focused on whole sector with
                                                   emphasis on basic education. AfDB’s Human
                                                   Capital Development strategy: 2012-2016 for
                                                   education, nutrition, health and safety nets
      EU             Agenda for Change             More and Better Education for All in               20% of ODA
      Institutions   (2011)—“sustainable           Developing Countries (2010)—focus on               on basic health
                     inclusive growth for human    whole sector approach and lifelong learning        and education9
                     development” is one of its    (including early childhood development,
                     two main priorities           primary and post–primary education)
      GPE            Only focused on education     GPE Strategic Plan 2012–15—focus on 4              100%
                                                   goals including access, equity, learning and
                                                   capacity-building in basic education (incl. pre-
                                                   primary, primary and lower secondary)
      World Bank     A Common Vision for the       Learning for All: Education Strategy 2020          $750 million
                     World Bank Group (2013)—      (2011)—focus on basic education but also           additional IDA
                     includes education, health    including post–primary to produce skilled          spending for
                     and nutrition as tools to     populations prepared for the demands of the        2011–15, a
                     improve welfare across        “knowledge economy”                                40% increase
                     multiple dimensions of                                                           over previous
                     poverty                                                                          five years
      UNICEF         Medium-Term Strategic         Global Education Strategy (2007)—focus             21% of regular
                     Plan (2006–13)—basic          on three priorities: equal access to primary       resources
                     education is second of 6      education, empowerment through girls               spent on
                     strategic priorities          education, education in emergencies and            education
                                                   two crosscutting themes: early childhood
                                                   development and school readiness, and
                                                   quality

10   FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION
recognized the importance of education for poverty          porting to the OECD DAC13 increased by 78 percent be-
eradication, economic growth and equality (Steer and        tween 2002–4 and 2009–11 (figure 1), while their total
Baudienville 2010).                                         aid increased by 90 percent. By comparison, bilateral
                                                            aid to education increased by 65 percent, compared
These findings raise important questions about the          with a 69 percent increase in overall aid. This suggests
proposition often put forward by multilateral devel-        that though bilateral aid to education grew somewhat
opment bank managers during our interviews: that            slower, it has more or less kept pace with growth in
many governments have no desire to borrow for basic         total bilateral aid while education has become a rela-
education, even for concessional loans. It is under-        tively lower spending priority among the five multilat-
standable that finance ministers of LICs may prefer         eral agencies.
grants, and be somewhat reluctant to take on loans,
even concessional ones, for education. However, the
evidence suggests that other factors may also be in         Share of Basic Education in Total Multilateral
play. The earlier study (Steer and Baudienville 2010)       Aid to Education Is Falling
found that the degree of country demand for funding         Multilateral agencies allocated a much greater share
varied by donor. It was felt more strongly by agencies      of education ODA to basic education than bilateral
that already prioritized education. This suggests that      agencies, although the share has fallen over the de-
recipients direct their demand to those agencies that       cade (figure 2). Multilateral agencies allocated 62 per-
they perceive to be interested in supplying it. The ADB     cent of their total education aid to basic education at
client survey also revealed that the ADB responded in       the beginning of the decade, but this share has fallen
only 40 percent of the countries that requested sup-        to 51 percent. By comparison, the share of bilateral
port for education with new lending operations, sug-        education aid going to basic education has increased
gesting a lack of capacity or interest to respond to this   slightly, from 33 percent to 38 percent between
demand (IED 2013).                                          2002–4 and 2009–11. However, the share still remains
                                                            low, largely due to the fact that France, Germany and
                                                            Japan are large donors to education by volume but
Multilateral ODA for Education                              are spending a large share of their education aid on
Has Increased, but Fallen Short of                          scholarships and student imputed costs. Excluding
Expectations                                                these three donors results in bilateral agencies dedi-
Despite the strong prioritization of education in of-       cating 54 percent of their education aid to basic edu-
ficial strategies and the demand for support in educa-      cation, on average, over the period 2009-11.
tion, the growth in multilateral ODA for education has
slowed. This has affected basic education in particular.    The declining share of multilateral education aid go-
                                                            ing to basic education coincides with increased atten-
                                                            tion to secondary and postsecondary education within
Multilateral Aid to Education Is Growing                    these agencies. This is in part a reflection of a shift to-
Slower Than Overall Aid                                     wards a whole sector or systems approach. A greater
Aid from multilaterals to education has grown over          recognition of the importance of higher levels of
the decade, but aid to other sectors has grown faster.      education, spurred on by deep concerns about youth
Aid to education by the five multilateral agencies re-      unemployment and the lack of skills in the developing

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                                     11
Figure 1. Multilateral Aid to Education has Grown Over the Decade, 2002–
        11 (Millions of Dollars)

                                      12000

                                      10000
         Constant 2011 US$ millions

                                      8000

                                      6000

                                      4000

                                      2000

                                         0
                                              2002   2003    2004     2005    2006     2007     2008     2009     2010     2011

                                                     Bilateral aid to education                 Multilateral aid to education
        Source: OECD-DAC.

     world, provides an opportunity but also a challenge to                       share of basic education in total education lending of
     basic education. Increased attention to higher levels                        the African Development Fund has shown a declining
     of education in a globalized world is clearly needed,                        trend over the past decade—from 56 percent in 2002
     but with these greater demands on education finance,                         to 41 percent in 2008.15 The AfDB has also formulated
     it has become even more important to enlarge the                             a Higher Education, Science and Technology Strategy
     overall envelope for education rather than diverting                         (HEST), which reflects its strategic decision to focus
     funding from basic education to higher levels of edu-                        on higher education based on its perceived compara-
     cation.                                                                      tive advantage. The shift has been framed within the
                                                                                  context of country demand and a perception that
     Figure 3 highlights the increasing trend in financing                        other donors are covering basic education.
     for post–basic education across four of the five mul-
     tilateral agencies reporting to the OECD-DAC.14 This                         Similarly, the ADB’s Education Sector Operations Plan
     shows that the declining share of basic education has                        reveals that it intends to move beyond a focus on
     been shifted more toward postsecondary than sec-                             school enrollment at the basic level to meet the needs
     ondary education. The strongest example of this shift                        of the region’s fast-growing economies and close
     is the AfDB’s increased focus on higher education. The                       labor market gaps. The ADB’s 2010 plan indicated a

12   FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION
Figure 2. Multilateral Aid to Basic Education is a Declining Share of Total
    Multilateral Aid to Education, 2002–11

                               4500                                                                                                                70

                                                                                                                                                         Share of total aid to basied education (%)
                               4000
                                                                                                                                                   60
                               3500
                                                                                                                                                   50
                               3000
  Constant 2011 US$ millions

                               2500                                                                                                                40

                               2000                                                                                                                30
                               1500
                                                                                                                                                   20
                               1000
                                                                                                                                                   10
                                500

                                  0                                                                                                                0
                                        2002      2003       2004       2005      2006       2007       2008      2009       2010       2011

                                  Bilateral aid to basic education
                                  Multilateral aid to basic education
                                  Share of bilateral aid to basic education as a proportion of total bilateral aid to education (%) (right hand axis)
                                  Share of multilateral aid to basic education as a proportion of total multilateral aid to education (%) (right hand axis)

    Source: OECD-DAC.

focus on universal secondary education, technical and                                       for the EU as a whole, that is, including member
vocational education, and support for higher educa-                                         states (EC 2010). Finally, while still very significant,
tion. The share of basic education in total education                                       the share of basic education in the World Bank’s total
ODA of the EU institutions fell from an average of 50                                       aid for education from its International Development
percent in 2002-04 to 43 percent in 2009-11, while the                                      Association (IDA) instrument, declined from an aver-
share of ODA to tertiary education increased from an                                        age of 63 percent in 2002–4 to 55 percent in 2009–11.
average of 27 to 34 percent over the same period. A                                         The share of secondary education increased from 19
recent communication also highlights that the share                                         to 23 percent and tertiary from 18 to 22 percent over
of ODA for higher levels of education is even greater                                       the same period.

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                                                                                                                 13
Multilaterals Have Become Less Important                                       shown that they have in fact been moving away from
     Funders of Basic Education                                                     basic education, there is great concern that this may

     The share of multilateral aid to basic education has                           not happen.

     also declined relative to bilateral donors. The top five
     multilateral agencies have reduced their share of to-                          Based on information reported to the OECD-DAC, the

     tal aid to basic education over the last decade from                           World Bank and EU are the most significant multilat-

     just over a third of global basic education aid to ap-                         eral players supporting basic education. It should be

     proximately one-quarter. This decrease coincided with                          noted that this includes unearmarked aid only, i.e. it

     an increase in aid volumes from key bilateral donors,                          does not include aid to basic education that bilateral

     in particular the United States, the United Kingdom                            agencies channel through multilateral institutions but

     and the Netherlands (see table 2). Given the recent                            earmark for specific purposes, which can be substan-

     reduction in aid volumes to basic education by some                            tial (see Box 3). Data on unearmarked aid presents

     large bilateral donors between 2010 and 2011, which                            important information on the resources over which

     is projected to continue for some of these donors, it                          multilateral agencies can make strategic choices in

     remains to be seen whether aid from the five multi-                            support to sectors, sub-sectors, and geographical

     lateral agencies will fill the gap. Given that we have                         areas.

        Figure 3. Basic Education Share in Total Education Financing Is Declining
        for Four Large Multilaterals—AfDB, EU Institutions, World Bank and
        UNICEF

                                               70

                                               60
           As a share of total education (%)

                                               50

                                               40

                                               30

                                               20

                                               10

                                                0
                                                    2002   2003   2004   2005   2006    2007      2008     2009    2010    2011

                                                      Basic education     Secondary education            Post-secondary education

        Source: OECD-DAC.

14   FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION
Of all aid donors (both bilateral and multilateral), the     cade, however. The percentage share of significant
World Bank has occupied the top position in terms of         projects approved in support of primary education de-
its share in total basic education for most of the past      clined from more than 6 percent in 2002 to only 1 per-
decade (it was second only in 2007 and 2008). At the         cent of the total in 2010. This weak performance led to
start of the decade, it was contributing more than           the establishment of the 2010 Education Operational
one-quarter of total basic education to all developing       Plan (IED 2013).
countries. However, with increased volumes from sig-
nificant bilateral donors, the share of total aid to basic   Finally, the GPE is an important multilateral agency
education disbursed by the World Bank now stands             supporting basic education but does not currently re-
at just under 15 percent. In absolute terms the World        port to OECD-DAC. Data from the GPE’s own sources
Bank’s IDA lending to basic education in 2011 stood          show its increasing importance compared with other
more or less at the same level as in 2002. The EU has        bilateral and multilateral donors to basic education.
also been a top 10 donor to basic education for all but      It jumped from being the 13th-largest donor in 2007
one of the years over the last decade. From 2005 on-         (disbursing $125 million) to being the 5th-largest
ward, it has been one of the top five donors.                donor in 2011, when its disbursements were at an all
                                                             time high ($385 million).16 However, the GPE’s funding
The African Development Fund, ADB and UNICEF’s               has been smaller than hoped. The 2011 replenishment
aid volumes to basic education have not been large           generated $1.5 billion for the years between 2011 and
enough for them to be in the top 10 donors over              2014, compared with the $2.5 billion requested (GPE
the period. In 2011 these donors ranked as the 18th-,        2011). In comparison, the Global Fund to Fight AIDS,
15th- and 19th-largest donors out of a total of 41, re-      Tuberculosis and Malaria, which was established at
spectively, with the African Development Fund’s dis-         the same time as the GPE,17 is expected to disburse
bursements to basic education totaling $90 million,          about $10 billion for the years between 2011 and 2013.
the ADB disbursing $128 million and UNICEF disburs-          Country programmable aid disbursed by global funds
ing $58 million. Basic education has been a declining        in 2011 was 10 times larger in the health sector, at $3.3
priority for the regional banks. A recent analysis of        billion, than in education, at $385 million.
ADB projects reveals a declining trend over the de-

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                                    15
Box 3: Bilateral aid earmarked for education channeled through
            multilaterals constitutes a large share of funds available for some of
            these multilateral institutions
            Multilateral aid contributions to basic education reported by the OECD-DAC only include unear-
            marked sources of financing and do not include earmarked contributions from bilateral agencies
            channeled through multilateral agencies (e.g., trust funds). These contributions are reported
            under bilateral aid, as decisions about the purpose of the funds, and often the geographical al-
            location, are made by the bilateral donor and not the multilateral agency. While some multilateral
            institutions may account for a relatively small share of total basic education aid as reported by
            the DAC, they may still manage large basic education programs through earmarked contribu-
            tions. For example, in addition to the $58 million of unearmarked aid to basic education, UNICEF
            managed $295.8 million of earmarked education funding from bilateral donors in 2011. This
            makes UNICEF the largest recipient of bilateral to multilateral funding to education (the World
            Bank is the second largest). Earmarked contributions to education from bilateral institutions
            channeled through multilateral institutions have grown significantly in recent years (see figure
            4). Attributing these earmarked funds to multilateral agencies rather than bilateral donors would
            result in an even stronger role for multilateral institutions within the education aid architecture.

            Figure 4. Earmarked Bilateral Aid to Education Channeled through
            Multilaterals, 2007–11
                                                  800

                                                  700
             USD million (constant 2011 prices)

                                                  600

                                                  500

                                                  400

                                                  300

                                                  200

                                                  100

                                                    0
                                                             2007            2008   2009             2010           2011
                                                        Af rican Development Bank          Asian Development Bank and Fund
                                                        EU Institutions                    World Bank - IDA
                                                        UNICEF

            Source: OECD-DAC.

16   FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION
Table 2. Top 10 Funders of Basic Education, 2002-2011
             2002                2003                 2006                2007                 2010                 2011
 Top 10 donors
 1    World Bank           World Bank           World Bank          Netherlands          World Bank          World Bank
      (27%), $810          (24%), $789          (13%), $612         (13%), $644          (12%), $724         (14%), $818
      million              million              million             million              million             million
 2    Netherlands          United States        Netherlands         World Bank           United States       United
      (10%), $285          (12%), $394          (12%), $555         (12%), $624          (11%), $658         Kingdom
      million              million              million             million              million             (12%), $708
                                                                                                             million
 3    IMF (9%), $272       Japan (7%),          United              United               EU Institutions     United States
      million              $242 million         Kingdom             Kingdom              (10%), $610         (10%), $570
                                                (11%), $506         (11%), $585          million             million
                                                million             million
 4    France, (7%)         United               EU Institutions     United States        United              EU Institutions
      $199 million         Kingdom (7%),        (10%), $458         (10%), $513          Kingdom (9%),       (7%), $418
                           $234 million         million             million              $533 million        million
 5    United               France (6%),         United States,      EU Institutions      France (7%),        Germany (6%),
      Kingdom (5%),        $183 million         (9%), $400          (8%), $403           $406 million        $368 million
      $150 million                              million             million
 6    Germany (4%)         IMF (5%), $162       Japan (6%),         Japan (6%),          Japan (6%),         UNWRA (6%),
      $127 million         million              $279 million        $314 million         $355 million        $357 million
 7    Japan (4%),          Netherlands          UNWRA (6%),         France (6%),         UNWRA (6%),         France (5%),
      $127 million         (5%), $162           $276 million        $295 million         $352 million        $301 million
                           million
 8    United States        Germany (4%),        Norway (4%),        UNWRA (5%),          Germany (5%),       Japan (4%),
      (4%), $126           $140 million         $185 million        $271 million         $339 million        $250 million
      million
 9    Norway (4%),         Canada (4%),         Canada (4%),        Norway (5%),         Netherlands         Australia (4%),
      $117 million         $134 million         $166 million        $238 million         (5%), $337          $233 million
                                                                                         million
 10   EU Institutions      Norway (4%),         Germany (3%),       Canada (4%),         Canada (4%),        Norway (4%),
      (3%), $100           $134 million         $154 million        $222 million         $255 million        $216 million
      million
 Sum of aid disbursed by five multilateral donors
      (35%), $1.05         (31%), $1.02         (26%), $1.18        (23%), $1.16         (26%), $1.61        (26%), $1.51
      billion              billion              billion             billion              billion             billion

Legend: Donor (percentage share of donor’s aid to basic education as a share of all donors’ aid to basic education), donor
disbursement to basic education (2011 constant dollars).
Source: OECD-DAC.

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                                          17
3. NEEDED: A COORDINATED                                  improve the monitoring of aid effectiveness and coor-

     GLOBAL RESPONSE                                           dination at the country level, building on its review of
                                                               aid effectiveness in partner countries undertaken in

     C   oordination among multilateral agencies, and
         between them and bilateral agencies, is vital to
     ensure that the financing gaps of countries most in
                                                               2012 (GPE 2012).

     need are filled. Such coordination would ensure that
                                                               Education Aid Remains Highly
     allocations of aid to subsectors and to countries is
                                                               Fragmented
     based on division of labor among agencies, taking
                                                               While there are a number of mechanisms for coor-
     account of the country’s needs and own domestic
                                                               dination among agencies, both internationally and
     resource mobilization potential. Under these arrange-
                                                               within countries, this coordination has not been able
     ments, decisions about whether a particular agency
                                                               to sufficiently direct decisions on where specific do-
     engages in the sector in a particular country are
                                                               nors would work and how aid could be most strategi-
     based, in principle, on a careful examination of each
                                                               cally deployed to fill gaps and reach those in need.
     donor’s comparative advantage and in coordination
     with other donors at the country level. Interviews with
                                                               To assess this, our analysis draws on data from
     the staff members of multilateral agencies confirm
                                                               the OECD, which developed a now widely accepted
     that the decision whether to engage in basic educa-
                                                               methodology to measure fragmentation, based on
     tion is indeed often based on arguments that other
                                                               significant relationships (OECD 2011). It defines what
     donors are already active in basic education and have
                                                               constitutes a “significant” aid partnership as one
     a comparative advantage to provide this support.
                                                               where (a) the donor is among the top donors that cu-
                                                               mulatively provide 90 percent of education aid to that
     In addition to coordinating resources by pooling
                                                               country (i.e., the donor’s contribution is significant
     resources through their own funding streams, mul-
                                                               to the recipient country; or the donor is important to
     tilateral agencies are widely considered as playing
                                                               that country) and/or (b) where the donor provides a
     leadership and coordination roles through leading do-
                                                               larger share of total aid to the education sector in the
     nor coordination mechanisms, facilitating stakeholder
                                                               recipient country compared with its share of total aid
     dialogue, convening international gatherings and es-
                                                               in that country (i.e., the donor gives a higher-than-
     tablishing common standards (DFID 2011).
                                                               average priority to education compared with other
                                                               sectors). The principle is that where an aid relation is

     Coordination Efforts in Education                         neither significant from a donor perspective nor from
                                                               a recipient’s point of view, there is an opportunity for
     There is a good deal of “coordination” activity led
                                                               rationalization (OECD 2011).
     by multilateral agencies (see table 3). At the country
     level, this coordination has been strongly promoted
                                                               The principle of significant aid partnerships is pre-
     by the GPE, which has placed country ownership and
                                                               mised on the idea that too many donors operating in
     the alignment of donor partners vis-à-vis education
                                                               a sector brings challenges for developing countries,
     plans at the heart of its activities. By supporting and
                                                               whose capacity to coordinate aid effectively from
     working through local education groups, the GPE has
                                                               many donors has repercussions for how well limited
     helped to strengthen the framework for donor co-
                                                               resources can be used. Alternatively, an ineffective
     ordination at the country level. It is also working to

18   FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION
Table 3. Selected Examples of Donor Coordination Initiatives by Multilateral Donors in Education
 Agency         At the Global Level                             At the Country Level
 ADB            • ADB has joined GPE board even though it
                  does not provide funding to GPE
                • ADB has established knowledge partner-
                  ships with regional hubs and created an an-
                  nual International Skills Forum series
 AfDB           • 2008 Higher Education Strategy (HEST) in-
                  cludes strengthening of regional centers of
                  excellence as one of three priority areas
 EU             • Coordination with member states through • New policy of coordination for 2014–20 pro-
 Institutions     EU institutions                           grams: EU bilateral aid will go to no more
                • Member of the GPE board                   than 3 sectors
                                                                • Piloting of joint programming approaches in
                                                                  a number of countries, developing joint plan-
                                                                  ning documents with member states
                                                                • Focus on greater transparency through re-
                                                                  porting to the International Aid Transparency
                                                                  Initiative (IATI)
 GPE            • 2012 monitoring exercise on aid effective-    • Support partner governments and local edu-
                  ness                                            cation groups to develop country education
                                                                  plans
                                                                • Provides support to ensure plans are fully
                                                                  costed, thereby setting terms for judging the
                                                                  adequacy of government and international
                                                                  partner financing of basic education
 World Bank     • Member of EFA steering committee              • Strong participation in the GPE, including
                • Member of INEE Steering Group                   as supervising entity for majority of GPE
                                                                  projects
                • Member of the GPE board
                                                                • Programming-for-Results lending instrument
                                                                  aims to pool World Bank lending with other
                                                                  donors and foster coordination
 UNICEF         • Leads UN Girls Education Initiative—a • Strong participation in GPE, including as
                  global partnership to narrow gender gap in managing entity in 8 countries and lead
                  education                                  coordinator of local education groups in 26
                • Co-leads UNHR Education Cluster—an ini-    countries
                  tiative to improve coordination of education • Plays key role in coordinating donor educa-
                  response in emergencies                        tion efforts in emergencies and conflict situ-
                • Member of INEE Steering Group                  ations.
                • Member of the GPE board                      • Education situation analysis focused on ex-
                                                                 clusion at the country level.

FINANCING FOR GLOBAL EDUCATION: OPPORTUNITIES FOR MULTILATERAL ACTION                                             19
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